Insider Buys and Sells: JPMorgan Chase, Royal Caribbean Cruises

|
 |  Includes: APOL, AXP, JPM, KMR, MOS, OPK, RCL, RLI, SWKS, WES
by: Asif Suria

Welcome to edition thirty four of Insider Weekends. Insider buying more than tripled last week with insiders purchasing $36.95 million of their stock when compared to $10.15 million in the week prior. Selling dropped with insiders selling $340.66 million worth of stock when compared to $503.16 million in the week prior.

Sell/Buy Ratio:

The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider buying in that week. The adjusted ratio for last week declined significantly to 9.22. In other words, insiders sold more than 9 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the week prior when the ratio stood at 49.56. We are calculating an adjusted ratio by removing transactions by funds and companies and trying as best as possible only to retain information about insiders and 10% owners who are not funds or companies.

Insider Sell Buy Ratio January 28, 2011

Insider Sell Buy Ratio January 28, 2011

Note: As mentioned in the first post in this series Introduction to Insider Weekends, certain industries have their preferred metrics such as same store sales for retailers, funds from operations (FFO) for REITs and revenue per available room (RevPAR) for hotels that provide a better basis for comparison than simple valuation metrics. However metrics like Price/Earnings, Price/Sales and Enterprise Value/EBITDA included below should provide a good starting point for analyzing the majority of stocks.

Notable Insider Buys:

1. JPMorgan Chase & Co. (JPM): $44.54

Director David C. Novak acquired 111,300 shares of this investment bank, paying $44.88 per share for a total amount of $5 million. Mr. Novak increased his stake by 103.85% to 170,871 shares with this purchase. 49,500 of these shares were acquired by Mr. Novak’s spouse.

This has been the only insider purchase over the last six months besides a small 200 share purchase of preferred stock by the Chief Risk Officer on October 14 as you can see from this page.

P/E: 11.25 Forward P/E: 8.04 Industry P/E: 9.7
P/S: 2.05 Price/Book: 1.05 EV/EBITDA: N/A
Market Cap: $174.16B Avg. Daily Volume: 35,636,400 52 Week Range: $35.16 – $48.2
Click to enlarge

2. Opko Health, Inc. (OPK): $3.85

Shares of this medical appliances & equipment company were acquired by 2 insiders:

  • CEO & Chairman Phillip Frost M.D. acquired 1,158,000 shares, paying $3.55 per share for a total amount of $4.11 million.
  • Vice Chairman & CTO Jane Hsiao, Ph.D acquired 200,000 shares, paying $3.55 per share for a total amount of $710,000.

This is the second week in a row that Opko Health has made our list. In a note I sent out to subscribers in October I mentioned,

Dr. Frost has been nibbling on small quantities of Opko stock every few days since the start of this year. These purchases were done indirectly through Frost Gamma Investments Trust. This relatively young Miami based company that was founded in 2006 has several potential drugs in Phase II and Phase III trials. The company also develops medical devices, vaccines and ophthalmic imaging systems. Revenue at Opko has been rising over the last several quarters but the company is still unprofitable and at its current run rate could run out of cash in less than a year unless revenue ramps up significantly. The stock has been rising steadily throughout this year in lockstep with Dr. Frost’s purchases.

The 73 year old Dr. Frost has had a distinguished career, serving as the CEO of IVAX Corporation from 1987 to 2006 before it was acquired by SINLetter portfolio holding Teva Pharmaceuticals (TEVA). He is currently the Vice-Chairman of Teva Pharmaceuticals (TEVA). He also serves on the boards of Northrop Grumman (NOC), Ladenburg Thalmann Financial Services (LTS) and Castle Brands amongst many others. I will definitely add OPK to my watch list for further research.

Mr. Frost’s shares were acquired indirectly through Frost Gamma Investments Trust, of which Phillip Frost is the trustee. Ms. Jane’s shares were acquired indirectly through Hsu Gamma Investment, L.P. Dr. Hsiao is the general partner of Hsu Gamma Investment.

P/E: N/A Forward P/E: N/A Industry P/E: 26.98
P/S: 34.25 Price/Book: 50.89 EV/EBITDA: -55.26
Market Cap: $983.12M Avg. Daily Volume: 492,369 52 Week Range: $1.6 – $4.2
Click to enlarge

3. Western Gas Partners Lp (WES): $32.53

Director James R. Crane acquired 123,484 shares of this natural gas Master Limited Partnership (MLP), paying $30.92 per share for a total amount of $3.82 million. Mr. Crane increased his stake by 22.46% to 673,247 shares with this purchase.

4,784 of these shares were acquired through the reinvestment of distributions and were acquired several months ago. The rest were acquired through open market purchases this week and last week. There have been nothing but insider purchases of this MLP with 5 different insiders picking up shares over the last four months including the CEO and the CFO.

P/E: 21.64 Forward P/E: 20.46 Industry P/E: 21.49
P/S: 8.95 Price/Book: 2.68 EV/EBITDA: 19.82
Market Cap: $2.25B Avg. Daily Volume: 278,900 52 Week Range: $19.78 – $33.21
Click to enlarge

4. Kinder Morgan Management LLC (KMR): $64.13

Chairman and CEO Richard D. Kinder acquired 15,000 shares of this oil & gas pipelines company, paying $64.78 per share for a total amount of $971,704. Mr. Kinder increased his stake by 7.45% to 216,252 shares with this purchase.

P/E: 83.29 Forward P/E: 35.43 Industry P/E: 21.49
P/S: 57.08 Price/Book: 2.36 EV/EBITDA: N/A
Market Cap: $5.79B Avg. Daily Volume: 286,178 52 Week Range: $50.67 – $67.56
Click to enlarge

5. RLI Corp. (RLI): $53.37

Shares of this property & casualty insurance company were acquired by 2 insiders:

  • Director Gerald D. Stephens acquired 6,605 shares, paying $54.33 per share for a total amount of $358,861.
  • Treasurer John E. Robison acquired 300 shares, paying $54.25 per share for a total amount of $16,274. Mr. Robison increased his stake by 16.21% to 2,151 shares with this purchase.
P/E: 9.66 Forward P/E: 13.44 Industry P/E: 11.67
P/S: 1.97 Price/Book: 1.25 EV/EBITDA: 6.17
Market Cap: $1.12B Avg. Daily Volume: 164,989 52 Week Range: $49.69 – $61.97
Click to enlarge

Voluntary Disclosure: I hold long positions in Opko Health (NYSE:OPK) and RLI Corp (NYSE:RLI) in my trading portfolio.

You can view the full list of purchases from this Insider Buying page.

Notable Insider Sales:

1. Royal Caribbean Cruises Ltd. (RCL): $45.55

Chairman & CEO Richard D. Fain sold 200,000 shares of this cruise line company for $46.63, generating $9.33 million from the sale.

This is a significant sale with Mr. Fain selling nearly 16% of his direct holdings.

P/E: 19.52 Forward P/E: 11.27 Industry P/E: 20.39
P/S: 1.54 Price/Book: 1.3 EV/EBITDA: 12.74
Market Cap: $9.80B Avg. Daily Volume: 2,533,120 52 Week Range: $21.97 – $49.99
Click to enlarge

2. Mosaic Co. (MOS): $79.78

Shares of this fertilizer company were sold by 8 insiders:

  • President and CEO James T. Prokopanko sold 52,000 shares for $74.61, generating $3.88 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Chief Financial Officer Lawrence W. Stranghoener sold 40,000 shares for $78.96, generating $3.16 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Executive Vice President Richard L. Mack sold 20,384 shares for $78.64, generating $1.6 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Vice President -Finance Anthony T. Brausen sold 9,500 shares for $75.65, generating $718,656 from the sale. 7,200 of these shares were sold as a result of exercising options immediately prior to the sale.
  • Vice President – Public Affairs Linda Thrasher sold 8,419 shares for $78.47, generating $660,639 from the sale. 875 of these shares were sold as a result of exercising options immediately prior to the sale.
  • VP – Phosphate Operations Gary N. Davis sold 7,900 shares for $76.40, generating $603,560 from the sale.
  • Director Harold H. Mackay sold 5,000 shares for $73.70, generating $368,519 from the sale.
  • Senior Vice President Norman B. Beug sold 3,280 shares for $80.13, generating $262,826 from the sale.
P/E: 18.38 Forward P/E: 15.23 Industry P/E: 13.68
P/S: 4.15 Price/Book: 3.43 EV/EBITDA: 13
Market Cap: $35.59B Avg. Daily Volume: 5,520,040 52 Week Range: $37.68 – $85.45
Click to enlarge

3. American Express Company (AXP): $43.86

Shares of this credit card company were sold by 2 insiders:

  • Chief Executive Officer Kenneth I. Chenault sold 170,000 shares for $44.56, generating $7.58 million from the sale. Mr. Chenault acquired 13,451 shares through the vesting of restricted stock units a day prior to the sale.
  • Director Jan Leschly sold 3,427 shares for $44.84, generating $153,668 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.

This is yet another significant insider sale with Mr. Chenault selling 21% of his direct holdings.

P/E: 14.32 Forward P/E: 10.88 Industry P/E: 12.27
P/S: 2.21 Price/Book: 3.37 EV/EBITDA: N/A
Market Cap: $52.80B Avg. Daily Volume: 9,148,370 52 Week Range: $36.6 – $49.19
Click to enlarge

4. Skyworks Solutions Inc. (SWKS): $31.33

Shares of this semiconductor company were sold by 4 insiders:

  • President and CEO David J. Aldrich sold 128,322 shares for $31.19, generating $4 million from the sale. 100,000 of these shares were sold as a result of exercising options immediately prior to the sale.
  • Senior. VP, Sales and Marketing Liam Griffin sold 32,500 shares for $33.01, generating $1.07 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • VP, Human Resources George Levan sold 20,985 shares for $29.20, generating $612,867 from the sale. 10,500 of these shares were sold as a result of exercising options immediately prior to the sale.
  • VP, General Counsel and Secretary Mark Tremallo sold 10,104 shares for $29.00, generating $293,016 from the sale.
P/E: 34.35 Forward P/E: 15.51 Industry P/E: 19.27
P/S: 5.09 Price/Book: 4.19 EV/EBITDA: 17.41
Market Cap: $5.66B Avg. Daily Volume: 4,069,090 52 Week Range: $12.64 – $33.22
Click to enlarge

5. Apollo Group Inc. (APOL): $41.02

Shares of this for-profit education company (parent of University of Phoenix) were sold by 2 insiders:

  • Vice Chairman of the Board Peter V. Sperling sold 60,000 shares for $42.11, generating $2.53 million from the sale.
  • Executive Chairman of the Board John G. Sperling sold 42,661 shares for $42.18, generating $1.8 million from the sale.

Mr. John Sperling’s shares were sold indirectly through a trust. This is the second week in a row Apollo Group has made our list.

P/E: 11.25 Forward P/E: 9.2 Industry P/E: 12.79
P/S: 1.21 Price/Book: 4.22 EV/EBITDA: 3.39
Market Cap: $5.87B Avg. Daily Volume: 3,196,660 52 Week Range: $33.75 – $66.69
Click to enlarge

You can view the full list of sales from this Insider Sales page.